This article has been reviewed by Sumeet Sinha, MBA (Emory University Goizueta Business School). Should you have any inquiries, please do not hesitate to contact at email@example.com.
Negotiation is a very valuable skill. Be it any business transaction like signing a contract, or a consumer purchase like buying or selling a car or house, or be it negotiating a higher salary at a job, negotiation skills are golden.
Best Negotiation Tactics (Jump To Section)
“Secrets Of Power Negotiating” by Roger Dawson is an international bestseller written by Rogen Dawson. Roger Dawson has helped thousands of people across the world get better at the negotiating table with the negotiation tactics he has mentioned in the book.
- 8 Steps To Financial Independence | Financial Freedom | Best Books List
- 10 Best Negotiation Tactics From Secrets Of Power Negotiating | Best Books List
- Atomic Habits Summary & 8 Key Takeaways | Best Books List
- 10 Best Credit Repair Books For DIY Credit Repair 
- 4 Best Books On Personal Finance For Kids 
- 16 Best Personal Finance Books For Teens And Young Adults 
- 27 Best Personal Finance Books To Read
Best Negotiation Tactics
We have written about the best negotiation tactics we discovered in the book “Secrets Of Power Negotiating” by Roger Dawson. If you enjoy reading, go grab a copy for yourself or a friend.
1. Bracketing: Put Your Desired Number in the Middle of the Negotiation Range
When establishing a negotiating range, ask for more than what you want. Do not give up too much too early. Buying a car with a target price of 18,000?
Salesman: This car is on sale for $20,000.
You: (instead of saying $18,000) Ah, I am thinking more like $16,000 for this one.
By saying a lower number than your desired price, you have established a negotiating range of $16,000 (your initial number) to $20,000 (the salesperson’s initial number).
In the mind, the salesperson is already calculating the mid-point by now, which is $18,000, which is your actual target.
When selling a car, you can do the ‘bracketing’ in your favor by giving out a higher price than you expect to establish a broader negotiation range and putting your desired price in the middle of the range.
2. Reluctance: Pretend To Be Not Too Eager To Do The Deal
When buying, you need to let the other side know that you are considering multiple options that suit your price/value range. The seller is less likely to go hard at negotiating because they will believe they can lose you as a client if they do so.
When selling, you need to let the other side know that you aren’t even sure if you want to sell it – because of an emotional attachment, maybe, or some other reason. The buyer is less likely to negotiate harder in that case.
3. Use Carefully Chosen Words and Body Language
Flinching: Act visibly surprised by the initial price offer (even if it feels reasonable to you). This will send a signal to the other party that they need to move the price in your favorable direction. They might straightaway offer a better price, in some cases.
Even if there is no better offer immediately, you have already communicated to them that you will be negotiating hard with a number far away from their initial number.
Remember, this can work either way, whether you are a buyer or a seller.
Vise: Never be the first person to say the number. Make the other side speak a number, and respond in a very calm manner “You’ll have to do better than that”. This way you already throw the ball in their court and make them negotiate against themselves, even without speaking out loud your first number.
Bestseller Personal Finance Books
4. Never Accept The First Offer
Even if the first offer seems like a good deal, don’t accept the first offer. Most likely, the other side has something better to offer you. If you accept the first offer, you’ll never know if you could get an even better deal, and may psychologically feel let down later.
5. Continue ‘Bracketing’ As The Negotiation Continues
As the negotiation progresses, the seller will try to converge and offer a lower price (than their initial price), and the buyer will offer a higher price (than their initial price).
Keep in mind two things about the magnitude: 1. Don’t move by a larger amount than what the seller has moved 2. Every round of negotiation, your move should be smaller in magnitude than the previous one.
For example, you are negotiating with a house seller, willing to buy a house for $475,000.
The salesperson has initially said their asking price is $500,000, and you have said your initial price as $450,000.
As negotiation proceeds, the seller might come down by $10,000, from $500,000 to $490,000.
The maximum you should go up from $450,000 is $10,000, i.e. your number in this round should not be more than $460,000.
In the next round, your move should be less than $10,000 on top of the $460,000, so let’s say something like $5,000. With each round of negotiation, your move should get smaller i.e. something like $10,000 then $5,000 then $2,000 then $1500, etc. You get the idea.
6. Always Trade-off Each Concession You Make
It’s not about being greedy. Let’s think about this for a moment.
Giving away a free concession gives the idea that you’re weak in negotiation and also opens up the door to further requests and even exploitation from the other party. They get one thing for free, so will come back and ask for more again.
Even if you don’t have anything in mind for the concession, throw the ball in their court – “If I do this for you, what can you do for me in return?” You might get something of value in return, or at least send the signal subtly that there are no freebies on the table.
7. Invoke A Higher Authority To Your Advantage
If the negotiation comes to a dead end and the other side does not respond favorably to your concessions, offer to take their offer to a higher authority for approval.
This way you buy the time, and also you personally don’t have to face the heat for not giving them a deal they want – “it’s the higher authority, after all”.
While mentioning the “higher authority”, keep it vague so that the counterparty cannot go around you and cut you out from the transaction. Say corporate, finance, accounting whatever, but keep it vague enough so they have to negotiate through you only.
Later, you can play ally with the counterparty and say something like “I tried my best to convince, but the corporate won’t budge. I really want to help you out. What is it that ‘we’ (referring to your counterparty and you – as a team working together) can give in return to convince them?”
With this move, you are building goodwill as well, as you are trying to help them close a deal.
8. Be Ready To Walk Away From The Table
If the negotiation process seems to be hitting a wall, and the other side is not willing to make any more concessions, you might have to resort to projecting your willingness to walk away from the deal.
You can clearly communicate that you are considering other alternatives at the same time as you are negotiating with them.
While selling, you can say there are other prospective buyers for your product or service.
While buying, you can say there are other alternative solutions from other businesses in the market.
9. When You Get Stuck On An Issue, Keep It Aside For Discussing Later
One more gambit for proceeding with the negotiation is to keep the issue aside and agree to come back to it later.
By doing this, you can work on and agree on more and more things, and when revisiting the unresolved issues in the end, the counterparty is less likely to disagree with something that can jeopardize all the hard work done till that point.
Also, hopefully by agreeing on more and more things, there will be a better understanding and more goodwill between the two sides, so there’s a better chance of working things out.
(Bonus) Deal With Small Concessions At The Very End
If you are the buyer, and at the very end of the negotiation, when you have covered all important aspects of the deal, you can try and ask for a small concession. You might get it, or even if you are denied, it wouldn’t matter much to you.
If you are the seller and the buyer asks for a concession at the very end, you can approach it in a couple of ways – you could ask for something in return (like an add-on, for a small price), or you could just smile and say something like “Oh, come on. You have already gotten such a great deal out of me”.
If, as a seller, you realize that the other party is acting too greedy at the last moment after all negotiations are done, you can even use the “Invoke Higher Authority” gambit.
If you want you can also withdraw your offer (if you are ready to lose the greedy client) by saying there was some update from corporate (for whatever – cost, pricing, market reasons), and not only can you not give them what they demanded at the end, but your last offer is also not valid anymore. At this point, you can offer a higher price now, in your favor, as the best that you can do.
Whenever, using the “higher authority” gambit, speak to the client as if you are on their side, and appear apologetic that you can’t help them get what they want.
10. Close The Deal Making The Other Side Feel Good
When everything is finalized, always close the deal with a sweet giveaway, asking nothing in return. It can be something small, a freebie that doesn’t cost too much, or a personalized onboarding/support – anything that can make them walk away happy and satisfied with the deal.
Shake hands and congratulate them on negotiating well and getting a great deal for themselves. Massage their ego, make them feel happy, and make them believe they won the negotiation.
- Atomic Habits Summary & 8 Key Takeaways | Best Books List
- 5 Best Pay As You Go Websites
- 10 Best Credit Repair Books For DIY Credit Repair
- 4 Best Books On Personal Finance For Kids
- 16 Best Personal Finance Books For Teens And Young Adults
- 27 Best Personal Finance Books
- 19 Best Personal Finance Reddit Communities You Should Join
- 19 Best Reddit Personal Finance Tips on r/PersonalFinance Threads
- Personal Finance Flowchart: 3 Helpful Ones For Beginners and Advanced Levels
- Are Americans Good at Personal Finance? 5 Facts on Personal Finance
- Beginner’s Guide to Personal Finance: 10 Steps To Manage Money Better
- 8 Cool Benefits of Obtaining A Personal Loan – When to Consider It?
- How to Build a Budget and Stick to It [Plus 4 Best Budgeting Apps]
- How to Use Credit Card Responsibly: 7 Must-Have Credit Habits
Our Financial Calculator Apps